from the there's-always-something dept

I agree almost entirely with Tim Lee's assessment of the Kindle e-book reader, posted Monday on these pages, but as a wireless and telecom analyst, there are aspects of the device that are interesting and important - unfortunately for Amazon, they aren't going to help make the Kindle a success. The most interesting factor is that Amazon is basically launching an MVNO, called Whispernet that will use the Sprint EV-DO network. It certainly won't be the first MVNO on Sprint, and it won't be the first mobile device maker to brand the wireless service as their own (think Palm VII's Palm.net, or Blackberry.net when they both resold Mobitex service). But the Kindle is one the first mainstream consumer electronics device we've seen that is not a computer and not a phone but which still connects to a mobile broadband network.

This portends a future (that Sprint has been talking up a lot lately with WiMAX) where myriad consumer electronics devices like cameras, GPS devices, sensors, signs, etc. all connect to the "cloud" and have service either bundled in retail prices, or into some other service fee like Amazon is charging for content. This kind of device is a break from the normally carrier-controlled handsets we usually see, and is interesting for that reason alone. It's also a break from the $80 rule, where non-phones can only connect to cellular data for $80/mo. Since the Kindle device has limited Internet functionality, Amazon can predict average monthly EV-DO throughput per device, and negotiate a much better wholesale data rate from Sprint than $80, and can then afford to bundle that into content pricing. Don't get me wrong -- I don't agree with the content pricing on the Kindle. But the launch of an "Open Access" consumer electronics device with wide area network access bundled in has got me excited. Imagine now a GPS device from Garmin or TomTom that comes with a cellular radio for traffic updates, local fuel prices, etc, and the data plan is bundled into the retail price. Wow! Consumer electronics devices that could work right out of the box with full mobile connectivity, and a carrier that is willing to wholesale reasonably for that network connection! The times are finally changing.

from the hello-walled-gardens dept

On Friday, I expressed skepticism that e-book technology has reached the point where it will overtake the paper book. Now Amazon's PR blitz has begun, and so we're getting more details about the Kindle's features and pricing. I'm not impressed. First, there's the obvious point that the device's DRM will make a lot of customers wary of getting locked into Amazon's proprietary platform. But the even bigger flaw is the pricing model. Apparently, Amazon will charge you $1.99 for public domain books like Bleak House. Kindle also provides you with access to blogs, but only 250 of them (including Techdirt), and you have to pay at least a dollar a month for the privilege of reading what you can see here for free. And you can subscribe to the New York Times, but you have to pay $13.99 per month for that. This really seems like a strange pricing strategy. A lot of consumers will balk at paying for blog content they've always gotten for free online. Likewise, giving away public domain books would be a good way to spur adoption of the device at very low cost to Amazon. And it's weird to charge so much for a digital newspaper at the same time newspapers are dropping their paywalls online. Even the price for new books, $9.99, seems too expensive. Publishers don't have to print, ship, and stock e-books, so their costs are obviously a lot lower. On top of that, the demand for a lot of books is likely to be quite elastic—cut the price in half and you could easily double the number of sales.

The one undeniably innovative thing about the Kindle is the free wireless EVDO access. The limits on access to Internet content may be an attempt to keep the bandwidth consumption down. But in a world where you can get an unlimited data plan for your iPhone for $20 per month, they should at least have an option for a flat rate "all you can eat" data plan, which would allow you to access Internet content and subscribe to an unlimited number of blogs, newspapers, and public domain books. Bezos obviously wants this to be the iPod of the printed word. But one of the crucial factors behind the iPod's success is that it gives you free access to content in open formats. You can rip your CDs and listen to them on an iPod. You can subscribe to an unlimited number of podcasts. With the Kindle, in contrast, Amazon apparently expects customers to buy an unfamiliar proprietary device, and then pay a premium to read content like blogs and public domain books that's available for free on the Internet. Somehow I don't think that very many people are going to go for that.